Pressure on NSW as Victoria in line for large-scale battery

Victoria has joined South Australia in lining up a new large-scale battery to support the electricity grid, adding pressure on NSW to follow suit.

The reliability of the National Electricity Market, a major political and economic issue in 2017, may be tested in coming days as a large heatwave sweeps across southern Australia.

Temperatures are forecast to reach 41 degrees in Adelaide and Melbourne, while parts of western Sydney will reach 42 degrees, the Bureau of Meteorology forecasts.

While a cool change will ease conditions in South Australia and Victoria on Sunday, Sydney is tipped to hit 37 degrees in the city and 45 degrees in Penrith.

A 100-megawatt battery supplied by Tesla is already providing support for the grid in South Australia. Its joint owner, France's Neoen, announced on Wednesday it had now signed a "support agreement" with the Victorian government for a 20-megawatt battery for its Bulgana Green Power Hub located near Stawell in western Victoria.

A Tesla car charging station is at South Australia's wind and solar battery plant outside of Jamestown. Photo: AAP

The battery's agreement opens the way for construction of a 204-MW wind farm, and will support a 40-hectare Nectar Farms glasshouse nearby. The farm would not have proceeded without the renewable energy project and battery - together costing more than $270 million - Neoen said.

Tesla's big $US50 million ($64 million) battery, the largest lithium battery of its kind, has drawn international attention since becoming operational near Adelaide last November.

While having a capacity to supply only about 30,000 homes for an hour, the battery also provides other grid services - as it did on hundreds of occasions in December alone, according to the Australian Energy Market Operator.

"The performance of the South Australian battery is outstanding," Franck Woitiez, Neoen's managing director," said. "The Bulgana battery is primarily going to provide energy to Nectar Farms and may support the grid in the future."

Lily D'Ambrosio, Victoria's energy minister, described the agreement as "a major step forward for communities, businesses and the renewable energy industry".

Tesla's 100 megawatt lithium-ion battery in SA provided grid services on hundreds of occasions in December, according to the Australian Energy Market Operator. Photo: David Mariuz

The Bulgana battery is not expected to come on line until mid-2019 but the agreement to proceed will likely be matched by many more this year and next, John Grimes, head of the Smart Energy Council, said.

"What we're seeing with the South Australian battery, what we're seeing in Victoria, is really the tip of the ice berg for a pipeline of projects that's coming along," Mr Grimes said. "This is a breakout year for energy storage."

Natalie Collard, an executive general manager at the Clean Energy Council, said the Bulgana hub and Tesla's big battery "show just how effective these new technologies are in responding quickly to support our existing power grid with backup electricity and a very diverse range of other services".

"Batteries will become a part of everyday life for households and industrial operations as they get progressively cheaper - and this will happen faster than most people think," Ms Collard said.

Luke Foley, the NSW Labor opposition leader, has criticised the Berejiklian government for failing to join other states in pursuing large-scale storage.

"Battery storage is essential to ensuring the supply of energy at the times of greatest demand," Mr Foley said in his budget reply speech in June.

"I call on the government to immediately tender for 100 megawatts (MW) of storage to be delivered and in place for this coming summer.

A spokesperson for NSW Energy Minister Don Harwin, though, said the government was "excited by the opportunities batteries present to both cut household bills and boost security of supply" and had recently released a home battery storage guide to help consumers make this decision.

"We continue to monitor technological advancements and are aware that new renewable energy projects are considering incorporating batteries," the spokesman said.

He also said the government had implemented all actions recommended by the Energy Security Taskforce to prepare for surging demand during summer, and that AEMO had said NSW was "well positioned" to cope with conditions such as during this coming weekend.

Ms D'Ambrosio told Fairfax Media that AEMO had advised Victoria "that there is a sufficient amount of energy available within the grid", and the government has put "contingency measures in place to ensure that remains the case over summer".